Goldman Sachs analysts say the risk of the U.S. economy falling into a recession within the next 12 months has doubled after the Fed’s recent 75 basis point rate hike. Chief Economist Jan Hatzius said that the chance of a recession had risen from 15% to 30%. They’re not the only ones thinking a recession is imminent. Elon Musk told Bloomberg that he thinks it’s “inevitable” in the long term and will likely hit the U.S. “soon.” In related news, Kristina Hooper, Chief Investment Strategist at Invesco, told Kitco News that now is a good time to be focusing and investing in gold. “Gold is holding its ground because the 75-basis point move was a massive red flag for many investors that the Federal Reserve is going to push the economy into a recession,” she said.


Business Insider/Harry Robertson
Goldman Sachs says the risk of the US falling into a recession within a year has doubled after the Fed’s aggressive rate hike

The risk of the US economy tumbling into recession over the next year has doubled following the Federal Reserve’s 75 basis-point interest-rate hike last week, according to Goldman Sachs.

The investment bank’s analysts, led by chief economist Jan Hatzius, said in a note Monday that the chance of a recession hitting in the next 12 months had risen from 15% before the rate hike, to 30% as of this week.

And they said the chance of a recession in the next two years had risen to just shy of 50%, from 35% previously.

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Kitco News/Neils Christensen
It’s a good time to be a gold investor even as the Fed raises rates – Invesco’s Hooper

Gold prices will remain well supported through the rest of the year as rising recession and stagflation fears dominates sentiment throughout financial markets, according to one market analyst.

In an interview with Kitco News, Kristina Hooper, Chief Investment Strategist at Invesco, said that gold was able to hold its ground after the Federal Reserve took the extraordinary step of raising interest rates by 75 basis points last week. This was the biggest rate hike in nearly 30 years. However, Hooper added that it shows just how worried the U.S. central bank is about inflation.

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Govt. Economists Fail To Say Recession Is Coming

The messaging seems to be clear among economists within the Biden administration: don’t say recession. They appear to be reluctant to say a recession is looming, despite warning the economy is likely to slow down.

Several of Biden’s economists were scattered around on several corporate news outlets, where they asserted inflation will likely “not come down to the Federal Reserve’s 2 percent target” and the US economy will “slow down” yet a recession is “not inevitable.”

You can read the full article, here.


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